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SAP Business One vs. Microsoft Dynamics 365: Which is Better?

SAP Business One vs. Microsoft Dynamics 365: Which is Better?

Small to medium-sized businesses often struggle during periods of growth. ERP software is designed to take the headaches out of day-to-day operations and can reduce those growing pains significantly. A couple of contenders to choose from are SAP Business One and Microsoft Dynamics 365. Which is better? Let's dig into the details of each package to find out.

Features and Capabilities

Both ERP solutions are scalable, flexible, complete packages that cover everything a company needs to be efficient. Additionally, they operate through modules plugging in additional features as needed.

Some of the features that both software programs share include:

  • Sales management
  • Customer management
  • Marketing
  • Purchasing
  • Finance and accounting (AR/AP/Bank Reconciliations)
  • Fixed asset management
  • Inventory management
  • Cash flow and budgeting
  • Planning
  • Predictive AI analytics
  • Real-time reporting
  • Payroll

Some features that are specific to each solution include:


  • Mobile sales
  • Warehouse management
  • Marketing campaigns
  • Service contracts management
  • Drill-down data tools
  • Multiple dashboards

MS Dynamics 365 Business Central

  • Customer service management
  • E-commerce
  • Supply chain services
  • Collaborative tools

Both solutions offer a wide variety of applications to integrate your entire company seamlessly. Although both are big-name players in ERP software, each has its own way of doing things.

SAP B1 has been around a long time, and MS Dynamics 365 is the new kid on the block. Business One has robust capabilities and is perfect for SMBs in the manufacturing and distribution industries. B1's well-developed inventory, financial, and production features are well respected within its customer base. One thing to note is that B1's CRM capabilities are outstanding, and it uses HANA in-memory RDBMS for very quick efficient performance that is tough to match. 

Reporting and AI

There is great power in reporting, and both programs offer customizable real-time reports to support multiple departments and help business owners make informed decisions. In addition, both ERP packages use AI (artificial intelligence) to help automate business functions and offer predictive analysis not only about what is going on within your company but also about market trends, economic factors, and other issues that may affect your business operations.

SAP Business One uses a powerful reporting tool called Crystal Reports, where you can seamlessly connect to the underlying databases and create just about any type of report making complex connections between different types of data in the system. It's easy to design your KPIs around custom reports and the built-in, pre-defined metrics. You can also use other third-party reporting tools to extract data from the system if you need.

MS Dynamics 365 uses Power BI for its customized reporting tool. You can create interactive visual reports from any part of your business pretty quickly and easily. Users enjoy the flexible interface. 


As you would expect, Microsoft Dynamics 365 integrates with many other Microsoft products, including Azure. You can also enhance the product with more than 750 add-ons from the MS AppSource marketplace.

When you set up SAP Business One, you choose ten core modules to give you all the functionality you need, often eliminating the need for anything extra. However, B1 integrates with dozens of third-party applications to extend the functionality and offer additional features you might need for your specific business.


Dynamics 365 Business Central allows customers to select the modules they need to customize their ERP solution. However, not all companies will know the best options to build out an entire ERP package.

SAP Business One provides new users with ten core modules and industry-specific solutions geared towards manufacturing, distribution, consumer products, professional services, wholesale, and retail. This approach takes the guesswork out of putting together the best solution for your business. Additionally, you can customize your ERP software with APIs, ISVs, and third-party add-on extensions. SAP's longevity in the ERP space allows them to offer extensive customization to personalize your software to meet your business needs.

Pricing & Licensing

Both ERP packages are affordable for most businesses. Dynamics 365 Business Central's licensing starts at $70-$130/per user per month. If you sign up for the Premium plan, which offers extra perks, it will cost you $100/per user per month. If you sign up for add-on integrations, your monthly fee per user will increase. That means if you enhance the software with a lot of extensions, your monthly cost could be much higher.

SAP B1's price structure and licenses are based on deployment preference, license type and the number of users. With SAP B1's on-premises software, you can expect perpetual licenses (starting at $1,600/user) where you pay a one-time fee and then an annual upgrade fee. With their cloud-based solution, you will pay a monthly subscription fee, starting at $56 per user per month.


It's important to understand that Microsoft Dynamics 365 is actually two ERP products - Business Central, which is geared towards SMBs, and then Dynamics 365 for Finance and Operations, which is for larger enterprises. So even though Microsoft touts Business Central as fully scalable to handle any size company, in reality, if you grow too large and outgrow the functionality, you will need to upgrade to Dynamics 365 and start over learning a new tool.

SAP Business One is fully scalable and easily able to handle small-medium-sized businesses for just about any industry. Where the software really shines is in the verticals of retail, financial services, consumer products, manufacturing, professional services, and wholesale distribution. The ERP solution was designed specially to support industry-specific functions.

When selecting an ERP solution for your organization, scalability is essential. You don't want to invest an enormous amount of time and energy getting everyone on board and loading your business information into a system only to outgrow it within a few short months or years.


Dynamics 365 Business Central runs in the cloud on Microsoft servers. They can implement Business Central on premises but prefer customers use the cloud-based version.

SAP B1 offers customers a choice. You can opt for the on-premises install or use the cloud-based solution. It's really up to you.

Final Conclusion

Choosing the right ERP solution for your business is a big decision. It will entail considering many factors, including scalability, price, value, and your specific industry needs and wants. Consider working with a reseller to help determine the best fit for your business.

For most SMBs, SAP B1 will be a great fit due to its maturity and robust options for managing all areas of your company operations from start to finish.

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